Amidst reports of narrowing differences on the Indo-US civil nuclear deal, American President George W Bush on Monday spoke to Prime Minister Manmohan Singh and both reviewed progress on negotiations for the agreement to make operational the pact.

"The two leaders expressed happiness at the strengthening of the bilateral relations and reviewed developments pertaining to negotiations on bilateral civil nuclear cooperation," PM's Media Adviser Sanjaya Baru said in a statement in New Delhi.

Singh accepted Bush's invitation to visit the US again and said a mutually convenient date would be worked out.

Bush's telephonic call comes close on the heels of the two countries reporting considerable progress in the negotiations for the 123 agreement at the last round of talks in Washington between Foreign Secretary Shyam Saran and US Undersecretary Nicholas Burns.

Burns was optimistic of the agreement being firmed up by the end of this month when he undertakes a visit here.

The American President's talk with Singh is also being seen as an attempt to clear the air following the political storm here over a strongly-worded letter to the Prime Minister by senior law makers like Tom Lantos, Chairman of the House Foreign Affairs Committee, Gary Ackerman, who is the Chair of the House Middle East and South Asia subcommittee, and others.

Expressing deep concern over India's "increasing cooperation" with Iran, the American lawmakers warned such ties could negatively impact bilateral ties in general and consideration by Congress of the bilateral 123 agreement (to operationalise the civil nuclear deal) in particular.

India's insistence on right to reprocess spent nuclear fuel and perennial cooperation even if it were to conduct an atomic test are among the differences the two sides are trying to iron out.

The two leaders discussed matters pertaining to the agenda of the G-8 Outreach Summit in Germany scheduled next month.

Singh conveyed India's commitment to work with other countries to deal with the problems of climate change and global warming, Baru said.

Singh said the problems of environment cannot be solved by perpetuating poverty in developing countries. The two leaders discussed the clean development mechanism and agreed that the emphasis has to be on greater energy efficiency and the development of new technologies, Baru said.

The leaders also emphasised the importance of a successful conclusion of the Doha Development Round of multilateral trade negotiations.

Emphasisng that India has a strong vested interest in the successful functioning of a multilateral trading system, Singh said New Delhi would like the Doha Round to adhere to the original understanding that it would be a development round.

Singh said India would like to work with all like-minded countries to make a success of Doha negotiations, Baru added.